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2024
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[2024] ZALMPPHC 125
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Mokgalakwena Local Municipality v Mamoloko Contractors CC and Another (10222/2022) [2024] ZALMPPHC 125 (25 September 2024)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
CASE NO: 10222/2022
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO THE JUDGES:
YES
/NO
(3)
REVISED
DATE: 25.09.2024
SIGNATURE:
In the matter between:
MOKGALAKWENA LOCAL
MUNICIPALITY
APPLICANT
-and-
MAMOLOKO CONTRACTORS
CC
FIRST RESPONDENT
THE SHERIFF,
MOGALAKWENA
SECOND RESPONDENT
JUDGMENT
BRESLER
AJ:
Introduction:
[1]
The Applicant (Defendant in the main case)
applies for the rescission of the judgment granted by above
Honourable Court in favour
of the Applicant (Plaintiff in the main
case) on the 14
th
of June 2023 for payment of R7,535,331.88, plus interest and costs.
[2]
A provisional/ conditional payment was made
to forestall execution and Part A is therefore no longer relevant.
[3]
The First Respondent delivered a notice in
terms of Rule 6(5)(d)(iii) in terms whereof two legal contentions
were raised:
3.1
The Founding affidavit was not properly
commissioned.
3.2
In the absence of a properly commissioned
affidavit, there is no Founding affidavit before court.
[4]
The aforesaid issue was disposed of during
the hearing of the matter before the Honourable Acting Judge Makoti,
who ruled that there
was substantial compliance with the
commissioning. He however dismissed the application for suspension of
the execution contemplated
in Part A of the proceedings before court,
with costs. There is currently a pending appeal against this
decision.
[5]
Hereafter, the Applicant supplemented its
papers and launched a second attempt at suspending the execution of
the judgment. The
second application was likewise refused and there
is a pending appeal against this decision as well.
[6]
As stated herein before, the Applicants
have since satisfied the judgment to forestall execution. A
suspension of the execution
is therefore no longer necessitated, and,
in this Court's view, it renders the pending appeals irrelevant.
[7]
On the 12
th
of June 2024, the First Respondent delivered an Answering affidavit.
The Applicant submits that this affidavit was delivered irregularly
since they have already delivered a Rule 6(5)(d)(iii) notice. The
Answering affidavit was furthermore delivered substantially out
of
time and not accompanied by an application for condonation. On this
basis, this court should disregard the affidavit
in
toto.
[8]
During argument, Adv. Tebeila also raised
the issue that the pending Appeals against the orders granted in
respect of Part A, prohibits
the Court from making a determination on
Part B. He submitted that the most favourable approach should be to
suspend the application
for rescission of judgment pending the
finalisation of these appeals. As stated before, this Court does not
agree with the submission.
Once there was satisfaction of the
judgment, it rendered the suspension of the execution moot. Likewise,
an appeal on the suspension
will in all probability then only be of
academic value.
Factual Synopsis:
[9]
It is apposite to briefly address the
factual background of this matter before dealing with the objections
of the Applicant in respect
of the delivery of the Answering
affidavit.
[10]
The common cause facts between the parties are quite straightforward:
the Applicant is allegedly
indebted to the Respondent in the amounts
of respectively R7,353,331.88 and R4,721,790.00 for services rendered
in terms of a written
service level agreement. As to amount of
R7,353,331.88 the First Respondent alleges that the Applicant
confirmed their indebtedness
to the First Respondent. This
confirmation is evidenced by a memorandum tabled by the Acting
Municipal Manager, HSM Ngoepe and
the Acting Manager for Technical
Services, MYE Molepo.
[11]
The Applicant delivered a written offer as contemplated in Uniform
Rule 34 on the 25
th
of April 2023, which offer was
accepted in writing on the 2
nd
of May 2023.
[12]
The deponent to the rescission application is the duly appointed
Municipal Manager, Mr MM Maluleka.
He states that the underlying
facts and circumstances that gave rise to the judgment being obtained
was not within his knowledge
and he had to research the position to
establish how it came about. At the time when the relevant incidents
transpired he was not
appointed in office.
[13]
The essence of the Applicant's grounds for
rescission encapsulated in the papers and enunciated in their Heads
of Argument as follows:
13.1
The judgment in the amount of R7,535,331.88
is premised on 14 (fourteen) invoices contained on a statement.
13.2
All the invoices (save for one) on the
statement, which make up the exact amount of the judgment debt, were
previously paid. The
parties settled those invoices on the basis that
an amount of R3,000,000.00 is to be paid to the First Respondent.
13.3
The settlement agreement included each and
every one of this invoices.
13.4
It stands undisputed that the amount of
R3,000,000.00 was duly paid. A day after the payment was made, the
First Respondent sought
to renege on the agreement. Irrespective if
the agreement pertaining to the R3,000,000.00 is found to be valid
and enforceable
or not, the fact remains that R3,000,000.00 was paid.
13.5
Further payment were also made hereafter
amounting to R1,794,998.00.
13.6
The Applicant obtained a forensic
investigation report from KEP. This report confirmed that most, if
not all, of the amounts were
not due to the First Respondent.
13.7
The Applicant was not allowed to pay
anything to the First Respondent as the South African Revenue
Services issued a notice to withhold
and immediately pay over to it,
all available funds to the First Respondent.
13.8
The officials that consented to the
judgment were not authorised to do so. The legal officer confirmed
under oath that he was acting
on his own and without authority and
that he was mistaken and 'ill-informed'. He therefore conceded
judgment in error.
[14]
The First Respondent's answering affidavit,
to a large extent, is premised on the remarks and findings in the
judgment of Makoti
AJ delivered on the 7
th
of August 2023.
[15]
The First Respondent therefore submits that
the findings of Makoti AJ is final in nature. The Court thus already
found that no case
was made out for rescission of the judgment.
Legal Framework:
Late filing of
Answering affidavit:
[16]
The
crux
of
the objection raised by the Applicant as to the delivery of the
Answering affidavit is the fact that the Respondent elected to
file a
Notice in terms of Rule
6(5)(d)(iii), that
was already disposed of and then continued to deliver an Answering
affidavit considerably out of time.
[17]
Erasmus,
Superior Court Practice
[1]
states
the following:
'Should the respondent
choose not to file an answering affidavit in response to the
applicant's allegations but to take a legal
point only, the court is
faced with two unsatisfactory alternatives should the objection fail.
The first is to hear the case without
giving the respondent an
opportunity to file an answering affidavit on the merits, something
the court would be 'most reluctant'
to do. The second is to grant a
postponement to enable the respondent to prepare and file an
answering affidavit, a course which
gives rise to an undue
protraction of the proceedings and a piecemeal handling of the
matter. '
[18]
In
casu
this
court is faced with a situation where the Answering affidavit was
delivered shortly before the hearing of the matter. Counsel
for
Applicant, Adv. Williams SC was however willing to proceed with the
matter and no substantial prejudice was argued. Having
regard to how
the court dealt with a similar situation in the matter of
Bader
and Another v Weston and Another
[2]
it
is evident that the correct approach to be followed is to not
encourage a piecemeal presentation of the matter whilst
simultaneously
not refuse the adjudication of the real issues to be
partially frustrated by a too rigid adherence to what is essentially
a rule
of practice
[3]
.
[19]
This Court is therefore of the view that it
is in the interest of justice to admit the Answering affidavit into
the record and to
take its contents into consideration in determining
the issues before court. This will ensure a swift and just
determination of
the real issues between the parties. Having found
that, this Court is furthermore of the view that a formal application
for condonation
will not be required. The mere fact that the
Applicant does not allege any substantial prejudice suffices in
justification of allowing
a full adjudication of this matter.
Rescission
of
a
judgment
granted by consent:
[20]
It is evident from the aforesaid factual
scenario, that the current application does not fall under the
auspices of Uniform Rule
42. This does not prevent the court from
determining the matter against the framework of the common law.
[21]
It
is trite law that a consent judgment can be rescinded in exceptional
circumstances. In the decision of
Gollach
&
Gomperts
(1967) (Pty) Ltd v Universal Mills
&
Produce
CO
(Pty)
Ltd and Others
[4]
the
Supreme Court of Appeal stated:
'A transactio, whether
extra-judicial or embodied in an order of Court, has the effect of
res judicata. (See Western Assurance Co.
v Caldwell's Trustee,
191B
AD 262
at p. 270; Van Zyl v Niemann,
1964 (4) SA 661
(AO) at p. 669H,
read with p. 6680; Cachalia's case, supra at p. 464; Estate Erasmus v
Church, supra at p. 28.) It is obvious that,
like any other contract
(and like any order of Court), a transactio may be set aside on the
ground that it was fraudulently obtained.
There is authority to
the effect that it may also be set aside on the ground of mistake,
where the error is iustus.
Natal Bank v R. Kuranda,
1907 T. H.
155
at p. 167; Estate Erasmus ' case, supra at p. 28; and see De Wet
and Yeats, Kontraktereg, 3rd. ed., p. 192, note (u). Kersteman,
Woordenboek, s.v. 'transactie', p. 549, after stating that a
transactio may be set aside when "een der partyen bedriegelyk
en
arglistig heeft gehandelt", includes amongst the grounds for
rescission
"dat 'er een
erreur in calculo, de uitreekening was begaan, so eischt de reede en
billykheid, dat door het vernietigen van
de transactie het ongeluk en
nadeel hem, die aldus bedrogen of verkort is, aangedaan, moet worden
hersteld en goedgedaan, ten ware'
er over het error in calculo,
erreur of tout in de uitreekening zelfs getransigeerd was.'"
[22]
And further
[5]
:
'Concerning judgments
entered by consent, the learned JUDGE-PRESIDENT accepted that they
could, "under certain circumstances",
be set aside "on
the ground of just error". It appears to me that a transactio is
most closely equivalent to a consent
judgment. (Cf. Cachlia's case,
supra at p.
464.)
Such a judgment could be successfully
attacked on the very grounds which would justify rescission of the
agreement to consent to
judgment. I am not aware of any reason why
justus error should not be a good ground for setting aside such a
consent judgment,
and therefore also an agreement of compromise,
provided that such error vitiated true consent and did not merely
relate to motive
or to the merits of a dispute which it was the very
purpose of the parties to compromise.'
[23]
In
Mudzingwa
v Mudzingwa
[6]
Gubbay
JA (as he then was) said:
'Furthermore, it is
firmly established that a judgment can only be rescinded under the
common law on one of the grounds upon which
restitutio in integrum
would be granted, such as fraud or some other just cause, including
justus error. Certainly
a litigant who is himself
negligent and the author of his own misfortune will fail in his
request for rescission. See Voet 2.4.14;
Groenewald v Gracia (Edms)
Bpk
1985 (3) SA 968
(T) at 972C - D and G - H.'
[24]
Gubbay CJ repeated the above principles in more detail in
Georgias
v Standard Chartered Finance Zimbabwe Ltd
[7]
,
a
judgment of the Supreme Court of Zimbabwe:
'The adoption of those
principles to an application to rescind a judgment given by consent
enjoins the Court to have regard to:
(a)
the reasonableness of the
explanation proffered by the applicant of the circumstances in which
the consent judgment was entered;
(b)
the bona fides of the
application for rescission;
(c)
the bona fides of the defence
on the merits of the case which prima facie carries some prospect of
success; a balance of probability
need not be established.
As has been stated
repeatedly too much emphasis should not be placed on any one of these
factors. They must be viewed in conjunction
with each other and with
the application as a whole. An unsatisfactory explanation may be
strengthened by a very strong defence
on the merits '
[25]
In
Ntlabezo
and Others v MEC for Education, Culture and Sport, Eastern Cape, and
Others
[8]
the judgment of the Zimbabwe Supreme Court was referred to with
approval by D van Zyl J in the Transkei High Court:
'The only question
which remains is whether this finding has the result that rescission
must be granted without considering factors
such as the bona fides of
the application for rescission. In Georgias v Standard Chartered
Finance Zimbabwe Ltd (supra) the Zimbabwe
Supreme Court, sitting on
appeal, held that, in deciding whether to rescind a judgment given by
consent, regard must also be had
to (1) the reasonableness of the
explanation proffered by the applicant of the circumstances in which
the consent judgment was
entered; (2) the bona fides of the
application for rescission and (3) bona fides of the defence on the
merits of the case which
prima facie carries some prospect of success
(at 132G - I). At 132C - D Gubbay CJ said the following:
"Although
lack of consent is undoubtedly the predominant factor in the decision
of whether or not to set aside
a
judgment purported to have been given
with the consent of the parties, regard must also be had, in my view,
to the factors alluded
to by Blackie J and mentioned by Mr De
Bourbon. I think that only where the defence offered to the action is
virtually unarguable,
or the delay in bringing the application
inordinate and unsatisfactorily explained, should
a
Court decline the relief of rescission."
I agree with this approach.'
[26]
The
aforesaid decisions were referred to with approval in the matter of
KR
Sibanyoni Transport Services CC and Others v Sheriff, Transvaal High
Court, and Another
[9]
.
[27]
It is evident that there can be other grounds for rescission based on
justice and fairness.
[28]
In the matter
in casu
this Court is not ignorant of the fact
that the granting of the judgment potentially caused a considerable
amount of wasteful expenditure
directly impacting taxpayers. Having
regard tot the contents of the Answering affidavit it is not in
dispute that payments were
potentially duplicated. There is no clear
version from the Respondent as to the alleged settlement agreement
that was concluded
and the consequential payment of R3,000,000.00
that followed. The First Respondent merely opposed the application
premised on the
findings of Makoti AJ referred to herein above.
[29]
This Court is therefore satisfied that, at the very least, the
bona
fides
of the defence has been shown to exists. If it is accepted
that an earlier agreement of settlement was
prima facie
concluded
which resulted in payment, and that further payments were made
thereafter, the defence carries a
prima facie
prospect of
success in that the tender was made in the mistaken belief that
monies were due to the First Respondent.
[30]
The Applicant explicitly indicated the circumstances under which the
tender was made that resulted
in the judgment being granted. The
officials of the Applicant were undoubtedly ignorant and / or
dismissive of the correct factual
position and acted accordingly.
[31]
On this basis, it is clearly in the
interest of justice for a rescission of the judgment to be granted
and for the parties to properly
ventilate the matter before court.
[32]
The Applicant submitted in its Heads
of Argument that the remaining relief is not pursued (repayment) as
the First Respondent is
indebted to SARS and the judgment in this
regard will serve no purpose. A proposed order was provided to the
Court setting out
the relief claimed at this stage.
Costs:
[33]
There is no reason why the costs
should not follow the outcome of the proceedings. Having regard to
the nature of the proceedings,
the duration thereof, the extent of
the pleadings and the importance to the parties, it is submitted that
costs to counsel should
be allowed on Scale C for services performed
after 10 April 2024.
Order:
[34]
In the result the following order
is made:
34.1
The judgment granted by this
Honourable Court on 14 June 2023 is hereby rescinded.
34.2
The First Respondent is ordered to
pay the costs of the application insofar as it pertains to obtaining
the rescission of the said
judgment under Part B of the notice
of motion, such costs to include:
34.2.1
the costs of 2 counsel on scale C; and
34.2.2
the opposed costs of the application enrolled
for hearing on 20 February 2024.
M BRESLER
ACTING JUDGE OF THE
HIGH COURT,
LIMPOPO DIVISION,
POLOKWANE
APPEARANCES:
FOR THE
APPLICANT
Adv. JO Williams SC
INSTRUCTED
BY
Popela Maake Inc Attorneys
info@pmaakeattorneys.co.za
pcmaake@pmaakeattorneys.co.za
FOR THE FIRST
RESPONDENT
Adv. SS Tebeila
INSTRUCTED
BY
Blakes Maphanga Attorneys
boloka@blakes.co.za
DATE OF HEARING
14 June 2024
DATE
OF JUDGMENT
25 September 2024
[1]
Van
Loggerenberg,
Erasmus
Superior Court Practice
Second
Edition on page D1 Rule 6 - 27
[2]
1967
(1) SA 134 (C)
[3]
See
p 138 of
Bader
supra.
[4]
1978
(1) SA 914
(A) at 922
[5]
On
922
[6]
1991
(4) SA 17 (ZS)
[7]
2000
(1) SA 126
(Z) at 132G
[8]
2001
(2) SA 1073 (TkH).
[9]
[2005] ZAGPHC 118
;
2006
(4) SA 429
(T)